Fiscal Reforms during Fiscal Consolidation: The Case of Italy
We discuss the strengths and weaknesses of the fiscal consolidation package adopted by Italy in 2011. Estimated at 3.3% of GDP, the tax measures were introduced to reduce public deficits without weakening the prospects of economic recovery or producing adverse redistributive outcomes. The tax reform mainly increases consumption and property taxes and gives relief for firms that recapitalize or hire young workers and women. To some extent, these measures are consistent with scholarly suggestions to foster short- and long-term economic growth by shifting the tax burden from capital and labor income towards consumption and property. Using microsimulation models, we evaluate the distributional and growth effects of the tax package. The indirect and property tax reforms are highly regressive, while the reform as a whole makes limited resources available for growth-enhancing policies, through a reduction in the effective corporate tax burden. We propose a revenue-neutral alternative reform that allows channeling more fiscal resources towards corporate tax relief, while at the same time producing less regressive distributional effects.
Volume (Year): 68 (2012)
Issue (Month): 4 (December)
|Contact details of provider:|| Web page: https://www.mohr.de/fa|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paolo M. Panteghini, 2001. "Dual income taxation : the choice of the imputed rate of return," Finnish Economic Papers, Finnish Economic Association, vol. 14(1), pages 5-13, Spring.
- Calmfors, Lars, 1993.
"Lessons from the macroeconomic experience of Sweden,"
European Journal of Political Economy,
Elsevier, vol. 9(1), pages 25-72, March.
- Calmfors, L., 1992. "Lessons from the Macroeconomic Experience of Sweden," Papers 522, Stockholm - International Economic Studies.
- Robert Z. Ailber (ed.), 2001. "International Finance," Books, Edward Elgar Publishing, volume 0, number 525, July.
- Buti,Marco & Deroose,Servaas & Gaspar,Vitor & Martins,JoÃ£o Nogueira (ed.), 2010. "The Euro," Cambridge Books, Cambridge University Press, number 9789279098420, Diciembre.
- Doris Prammer, 2011. "Quality of taxation and the crisis: Tax shifts from a growth perspective," Taxation Papers 29, Directorate General Taxation and Customs Union, European Commission.
- Massimo Bordignon & Silvia Giannini & Paolo Panteghini, 2001. "Reforming Business Taxation: Lessons from Italy?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(2), pages 191-210, March.
- Edyta Mazurek & Simone Pellegrino & Achille Vernizzi, 2010. "The Decomposition of the Redistributive Effect and the Issue of Close Equals Identification," Working papers 16, Former Department of Economics and Public Finance "G. Prato", University of Torino.
- Mervyn A. King & Don Fullerton, 1984. "The Taxation of Income from Capital: A Comparative Study of the United States, the United Kingdom, Sweden, and Germany," NBER Books, National Bureau of Economic Research, Inc, number king84-1, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:mhr:finarc:urn:sici:0015-2218(201212)68:4_445:frdfct_2.0.tx_2-l. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert)
If references are entirely missing, you can add them using this form.